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Is UPI MDR Applicable to UPI Autopay?

Learn whether UPI Autopay is exempt from MDR: automated UPI mandates do not carry prescribed MDR charges, for any amount.

India — 17 September 2026. Effective from 15 October 2026 under Finance Ministry Gazette S.O. 5075(E) dated 14 September 2026 and NPCI circular + 35-question FAQ dated 15 September 2026.

Recurring payments have a clear exemption. UPI Autopay will not attract the new MDR — at any amount.

Quick Answer

No. UPI Autopay does not carry prescribed MDR.
This covers all automated recurring standing instructions set up as UPI Mandates or Autopay, at any amount, in any category.
The exemption spans subscriptions, EMIs, insurance premiums, utility autopays, and all recurring investments including mutual fund SIPs.

In short: a one-time UPI checkout above Rs 2,000 can attract MDR to the merchant. The same amount flowing through an approved Autopay mandate does not.

What the Official FAQ Says — Verbatim

NPCI FAQ Q22 states:

No, automated recurring standing instructions, known as UPI Mandates or AutoPay, do not carry prescribed MDR transaction charges... all recurring investments etc. will not pay any prescribed MDR charge.

The gazette schedules MDR only for select one-time P2M checkout transactions. Standing mandates sit outside that schedule entirely — the exemption is structural, not a concession the merchant opts into.

How a Mandate Differs From a Manual Payment

A UPI mandate is a one-time approval with the UPI PIN that authorises future debits on a schedule — amount, frequency, and end date are fixed upfront. After that, each debit happens automatically without a fresh approval.

A manual UPI payment, even for the same SIP amount every month, is a fresh one-time P2M transaction each time. It follows the standard MDR rules above Rs 2,000. So two investors putting Rs 5,000 a month into the same fund can face different MDR treatment: the one on Autopay is exempt, the one approving manually each month is processed as a one-time payment where the capital-markets rate (0.02%) can apply on the merchant side.

Autopay vs One-Time UPI — The Difference

Payment type	How it is initiated	MDR from 15 Oct 2026
One-time P2M above Rs 2,000 (standard merchant)	Scan QR / checkout and approve	0.4% capped at Rs 300 (merchant)
One-time P2M above Rs 2,000 (concessional)	Same as above	Flat Rs 5 (merchant)
One-time P2M above Rs 2,000 (capital markets)	Same as above	0.02% capped at Rs 300 (merchant)
Any P2M up to Rs 2,000	Same as above	0%
UPI Autopay / Mandate (any amount, any category)	One-time mandate approval, then auto-debit	0% — fully exempt
P2P transfer	Send to personal UPI ID	0%

Worked Examples for Investors

Rs 500 monthly SIP via manual UPI: 0% MDR anyway, because each transaction sits under Rs 2,000. The mandate question does not arise.
Rs 5,000 monthly SIP via manual UPI each month: processed as a one-time capital-markets P2M above Rs 2,000, so 0.02% (about Rs 1) can apply on the intermediary's side per transaction.
Rs 5,000 monthly SIP via UPI Autopay mandate: 0% MDR regardless of amount, per Q22. The investor's account is debited exactly Rs 5,000.
Rs 12,000 annual insurance premium via Autopay: 0% (exempt). Paid as a one-time UPI checkout above Rs 2,000, the same premium would fall in the concessional flat-Rs-5 bucket on the merchant side.
Rs 25,000 quarterly SIP via mandate: 0% — the exemption has no upper amount limit.

Consumers never pay MDR in any row. Merchants and intermediaries pay only on the non-exempt rows.

Do Existing Mandates Need Any Change?

No. Existing Autopay mandates continue at 0% MDR with no re-authorisation needed because of this notification. The exemption attaches to the mandate structure, not to when the mandate was created.

For new SIPs, the mandate route is now strictly better than manual monthly UPI pushes for amounts above Rs 2,000: identical automation benefits as before, plus explicit MDR exemption. Check that the mandate is genuinely registered as UPI Autopay in the banking app — a standing instruction to oneself to "pay every month" is not a mandate until the PIN-approved e-mandate exists.

What Does Not Count as Autopay

Manually approving a fresh UPI payment each month, even for the same SIP amount.
Paying through a new QR code or checkout link each time.
Auto-reminders or calendar nudges that still end in a manual approval.

Those are one-time P2M payments and follow the standard MDR rules above Rs 2,000.

Timeline

14 Sep 2026: Gazette S.O. 5075(E).
15 Sep 2026: NPCI circular + 35-question FAQ, including the Q22 exemption verbatim.
15 Oct 2026: MDR takes effect for non-exempt P2M above Rs 2,000. Autopay remains 0% before and after.

Sources

Finance Ministry, Department of Financial Services — Gazette Notification S.O. 5075(E) dated 14 September 2026 — egazette.gov.in
NPCI circular and 35-question FAQ on Merchant Discount Rate (MDR) on Select UPI P2M Transactions dated 15 September 2026 — FAQ mirror: https://financialservices.gov.in/sites/default/files/2026-09/FAQs---Merchant-Discount-Rate--MDR--on-Select-UPI--P2M--Transactions_0.pdf
NPCI — UPI Autopay Product Overview
NPCI — UPI Product Overview
Department of Financial Services — Official Website

Disclaimer

This article is for general educational awareness only and does not constitute investment, tax, legal, or financial advice. Market-linked products are subject to risk, and past performance does not guarantee future results. Product eligibility, costs, liquidity, taxation, and terms can change. Review the latest official product documents and consider a suitably qualified professional if you need advice for your circumstances.